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What’s the smart way to buy a smartphone?

This week saw the second anniversary of the launch of the iPhone 6 – many buyers of that phone are coming off their two year contracts now. Before they go on to another postpaid contract to acquire the iPhone 7 on sale tomorrow, they should consider their options carefully. In my view, buying the phone yourself and adding a SIM card is the best way to go for the canny buyer.

Read the column at economuse-2016-09-15

Submission to NZ regulatory review

The Ministry of Business Innovation and employment NZ is moving to the building block method (BBM) adopted by the ACCC some years ago.There are several ultra-fast broadband providers in NZ and one of them also has a copper network with no decommissioning deadline. The Ministry is seeking views on how this wholesale sector should be regulated from 2020.

My submission suggests that the BBM is just one step towards the utility style regulation that it wants. NZ has the opportunity to also adopt utility style wholesale pricing which addresses its concerns about anchor products, encourages adoption and use of broadband networks while avoiding the mistakes made by Canada and Australia.

The submission can be accessed here: NZ-2016

Time to test $300m pa for USO?

This one page Economuse draws attention to the $3oom pa paid to Telstra for the “copper continuity obligation”, which maintains fixed copper services outside the NBN fixed network footprint. It suggests that changes to the definition of the USO and the growing availability of mobile services mean that there may be savings possible in a renegotiated contract. See Economuse 2016-07-14

The NBN and competitive neutrality

In my previous column, I said I would explain how the discount rate might be set for a company with neither debt nor equity. The NBN is not quite the same but the same solution was used for it both by the ACCC and the BCR. Combining that information with the BCR’s estimate of the economic loss that the NBN incurs in supplying fixed wireless and satellite services, I find that that there is some evidence that the NBN is breaching competitive neutrality – i.e. competing unfairly. This issue was first raised by the NBN’s competitors in greenfield fibre sites and the issue is likely to arise again.

The most logical solution, it seems to me, is to write-down assets (and the corresponding amounts in the ICRA) so that the overall internal rate of return becomes commercial.

For more, see Economuse 2016-06-06

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